Insulation project to create 2000 jobs

John Key is upbeat about the insulation scheme, but was left punctured over his cycleway proposal. Photo / Mark Mitchell

The Government's home insulation scheme will generate about 2000 jobs over four years, says Prime Minister John Key.

He produced the figure, from the Energy Efficiency and Conservation Authority, giving the number in response to a second day of Labour questioning in Parliament over the Job Summit and mounting job losses.

The Government allocated $323.3 million for the scheme, which provides subsidies for insulating and heating homes built before 2000.

The scheme starts on July 1 and aims to insulate 60,500 homes each year for four years.

However, Mr Key was unable to say how many jobs his cycleway was expected to create - and had to resort to trying to turn the tables by pointing out that numbers on the unemployment benefit rose from 64,000 to 124,000 between 1987-1989 - "the exact period when the Minister of Employment in New Zealand was the Hon Phil Goff".

Finance Minister Bill English was left to defend the nine-day working fortnight, telling Labour's David Cunliffe that while Labour may be unimpressed the families of those whose jobs were saved were thankful.

Minister of Social Development Paula Bennett told the social services select committee she expected the benefits bill to be $38.6 billion over the next five years - $4 billion higher than forecast in the December fiscal update.

People receiving a benefit had already risen to 302,000 - the highest level since 2005 - and numbers on the unemployment benefit were expected to double from 45,000 to 90,000 in 2011.

Ms Bennett clarified figures the Government was using of about 1100 new people signing up for the unemployment benefit each week.

She said it was a net figure and took into account about 1600 who were also going off the unemployment benefit each week. However, numbers fluctuated especially as seasonal work dried up.

Social Development Ministry chief executive Peter Hughes said there were some encouraging signs - between half and two-thirds of those going on the unemployment benefit soon found new jobs.